February 22, 2006
Back From The Dead
Just as we suspected, Oregon's Measure 37 -- a law that requires state and local governments to compensate landowners for rules that reduce property values -- wasn't actually dead. The state Supreme court just resuscitated it, after a lower court had struck it down last fall.
The Oregonian has more details and context.
February 17, 2006
All's Well that's Gladwell
Looking for something cool to read? Try this article by Malcolm Gladwell in this week's New Yorker. Gladwell discusses an unusual intersection of policy, politics, and mathematics--namely, social ills that follow the "power law," in which a relative handful of bad actors are responsible for the bulk of a problem. Take, for example, pollution from cars:
Most cars, especially new ones, are extraordinarily clean. A 2004 Subaru in good working order has an exhaust stream that’s just .06 per cent carbon monoxide, which is negligible. But on almost any highway, for whatever reason—age, ill repair, deliberate tampering by the owner—a small number of cars can have carbon-monoxide levels in excess of ten per cent, which is almost two hundred times higher. In Denver, five per cent of the vehicles on the road produce fifty-five per cent of the automobile pollution. [Emphasis added.]
The problem, according to Gladwell, is that even if the lion's share of problem is caused by the statistical outliers, our solutions tend to treat everyone the same -- as if we're all equally responsible. The patina of fairness may be reassuring to politicians. But substantively, fairness doesn't always lead to the best outcomes.
We deal with emissions, for example, by requiring each car--even the cleanest models--to be tested every year or two. For dirty cars, that's not often enough: a polluting car in need of repair can stay on the road for quite a while before anyone checks on it. But for owners of relatively clean cars, the vehicle emissions test is just a time-wasting formality. And all the while, it's easy enough to monitor a vehicle's emissions from the roadside as the car passes, which would let police pull over polluters as if they were speeders. The technology's been around for decades. All that's missing, apparently, is the political will, or maybe the creativity, to make it happen.
Of course, there's plenty of reason to be cautious here. The most polluting cars tend to be owned by the most economically vulnerable among us; pulling them over for polluting would just add to their burdens. But here, too, Gladwell's approach to "power law" problems might offer a solution: offering free repairs, or letting the owner of a severely polluting vehicle trade it in for a non-polluting one at no cost, might well be cheaper than maintaining the existing vehicle inspection system. Of course, it hardly seems fair to deal with this sort of problem by handing out clean cars or free repairs; that's a benefit that the rest of us certainly didn't get. But for some things, fairness and efficiency don't always go hand in hand; sometimes we have to choose one or the other.
Update: Just to be clear, I don't know that I agree that .06 percent carbon monoxide is "negligible," as Gladwell says. For any individual car it may be. But there are an awful lot of cars out there, cumulatively producing an awful lot of CO. Even if you could get rid of the outliers, I'm sure that people who live near highways and busy streets would be grateful to get those emissions down.
Accounting for Endangered Species
In the Washington Post today, an ominous headline for endangered species: "The True Cost of Protection?"
Dust off your sense of outrage, fellow taxpaying Americans, because as the article informs us, protecting endangered species cost $1.4 billion in 2004. So magnificent is that figure that the writer sneeringly suggests that king salmon are so called because recovering them cost the princely sum of $160 million in '04. By the tenor of the piece we are supposed to feel that spending $5 million on gray wolves is magnanimous, while spending $11,000 on a rare species of beetle is the height of absurdity.
What's truly outrageous is the intimation that somehow the species themselves are to blame for their costly predicament. Like lazy welfare queens, these imperiled animals should pony up. Never mind that wild Columbia River king salmon are perhaps 1 percent of historical abundance because a welter of industries were given free rein to destroy them. Clearcuts, dams, voracious fisheries, nuclear plants, pesticides... the list of culprits is long and it is to them that the $160 million bill should be assessed. The cost is not of "protection" as the writer asserts, it is instead the cost of heedlessly trampling ecosystems.
It's apropos that the headline editor added a question mark because, in truth, none of the dollar figures cited in the article actually amount to the "true cost" of protection. Like a blinkered accountant tallying only expenses but not revenues, the article utterly fails to mention any of the monetary benefits of species recovery. (And I won't even mention the inestimable non-monetary ones). Study the "costs" of protection for a moment and you'll see that the figures just don't add.
In the Yellowstone region, University of Montana economists have estimated that gray wolves have generated $23 million dollars in tourism to gateway towns. Add to that the many millions of dollars in central Idaho and the Upper Midwest, where gray wolves are also rebounding, and it turns out that wolves not only pay for themselves, they pick up the tab for those good-for-nothing salamanders, and still return a hefty dividend to taxpayers.
In Idaho, fully functioning sport salmon fisheries have been valued as high as $544 million per year. Though that estimate is disputed, it's for just one year for one of the several states where that $160 million was spent in 2004 to assist king salmon.
I could go on and on. The point is, the "true cost" of endangered species protection is much lower than the greenbacks that the US Fish & Wildlife Service lays out. It's even possible that the investment is actually a net benefit for the economy, if one bothers to factor in the revenues of wildlife-based tourism, ecosystem services, and sport (and commercial) fisheries. And that's just the dollars and cents, which is a lamentably poor way to value our natural heritage.
Even if they never do hold steady jobs and pay back what they rightfully owe us taxpayers, protecting and restoring endangered species is worth the price. When I consider the meaning of those species, their uniqueness in geography and history and their symbolism of wildness, $1.6 billion just doesn't seem like very much money to me. Especially when I remember that it's spent on species across the entire country--from Florida manatees to Northwest salmon.
Where I live, in Seattle, officials are just about to plunk down $3.5 billion in tax dollars to build a 2 mile long tunnel. Enough said.
February 16, 2006
Do Mess With Taxes
The basic point here (NY Times, registration required) is pretty good: the idea of coupling a gasoline tax increase with a cut in payroll taxes deserves a much closer look. It makes sense as a policy -- gas taxes should be higher, and a payroll tax cut could help soften the blow. Plus, pairing a tax increase with a tax cut seems to draw far broader political support than a straight-out hike in gas taxes:
The gasoline tax-cum-rebate proposal enjoys extremely broad support. Liberals favor it. Environmentalists favor it. The conservative Nobel laureate Gary S. Becker has endorsed it, as has the antitax crusader Grover Norquist. President Bush's former chief economist, N. Gregory Mankiw, has advanced it repeatedly.
Ok, so it's a good idea. But I can't help myself -- I'm going to pick some nits.
First, I think it's going too far to claim, as the article seems to, that it will be easy to sell this kind of thing to the public. Voters seem to forget about tax cuts: for example, in the runup to the 2004 election -- and despite the administration's efforts to tout their income tax cuts -- US voters were more likely to say that their taxes had gone up over the previous 4 years than down. On the other hand, everyone knows when gas prices go up -- it's emblazoned over every filling station. So people will be reminded of the tax increase every day, but notice the tax cut they only see if they look carefully at their payroll records. That's a pretty good recipe for outrage, unless you work really, really hard to explain to people what's happening.
Second, there are still some regressive effects here. If you're a retired senior, you don't pay payroll taxes -- so you'll see no benefit from the payroll tax cut. But you'll still be hit by higher gas taxes. Same thing if you're unemployed. (Undoubtedly the AARP, among others, will have a few things to say about this.)
Third -- why just gas? I know, I know, oil makes us vulnerable to foreign political shocks, sucks money out of the economy, yada yada. But gas represents only 43 percent of total US petroleum consumption (see here for details); so we should be taxing all petroleum consumption, not just gas. And more broadly, natural gas and coal are both major greenhouse gas sources -- coal even moreso than gasoline. Coal-fired power plants are also bad news for air quality, and put mercury in our fish. And natural gas production within the US is headed in the same direction as oil--down--which means that soon enough our natural gas imports will start sucking serious money from the economy, just as oil imports do now. All of which suggests to me that a broader tax on carbon, or natural resource use, would be better than just a tax on gas -- and might even allow for steeper payroll tax cuts.
And finally -- gas taxes are all well and good. But they're not the be-all-end-all when it comes to promoting fuel efficiency. Pay by the mile car insurance and feebates get even less air time in policy circles than tax shifting -- but arguably would be just as effective, if not moreso, at promoting fuel conservation. Obviously, I'm always glad to see gas taxes discussed in a public forum. But it would be even niftier to see other worthwhile ideas get some attention.
February 15, 2006
Timing is Everything
One benefit of living in a compact neighborhood rather than a sprawling suburb: you don't spend as much time in your car. The following chart, derived from a national transportation survey, makes the point pretty clearly:
The bottom line: if you live in a compact place, you don't drive as much. Of course, the total amount of time that people spend getting from place to place doesn't vary much by neighborhood density. What changes is how people travel. If you live in a compact neighborhood, you're more likely to take a trip on foot or by transit. If you live in a sprawling one, you take virtually all your trips inside a car, truck, minivan, or SUV.
Obviously, if you like spending time in your car -- and some people definitely seem to view driving as quality private time -- then this information probably won't affect you one way or another. But if you don't really like driving, then this may give you a clue about how to cut your car time in half.
Perhaps everyone else knew this, but I certainly didn't: most residents of the northwest US were born outside the state where they now live. Roughly 53 percent of folks who live in Idaho and Washington, and 55 percent in Oregon, are transplants, born either in another state or country. (For the record, I'm a wanderer too, born and raised on the east coast.)
For the most part, in-migrants came from other parts of the US, rather than overseas. As of 2000, only 1 in 20 residents of Idaho, 1 in 12 residents of Oregon, and 1 in 10 Washingtonians were foreign-born. The rest of us came from other parts of the US. (Of course, there's some overlap here; some folks who were born in, say, Washington now live in Oregon. So there may be quite a few people who didn't move far -- but the Census site where we got these numbers couldn't tell us specifics.)
British Columbia, on the other hand, has a substantial population of international in-migrants: 1 in 4 residents of the province were born in another country, mostly in Europe or Asia.
I have no larger point here -- other than a bit of surprise that, for a place that seems to have inspired genuine loyalty among its inhabitants, our roots may be a bit shallower than I'd thought.
February 14, 2006
Hybrid Hype: Incentives Gone Wild
Well, not so fast, says a great article in today's Washington Post. [Free registration req'd.] There's growing reason to believe that those incentives for hybrids will make things worse--actually generating more gasoline use, not less. That's because many of the incentives confuse the means for the end.
Reducing fuel use (and attendant ghg emissions, air pollution, etc.) is the goal; getting drivers into hybrids is simply one instrument in pursuit of that goal.
But one of the more popular incentives to boost fuel efficiency has been to encourage hybrid ownership by offering hybrid drivers access to HOV lanes, even when the drivers are alone. And as the article rightly points out:
An incentive -- whether it's access to a carpool lane or cut-rate financing -- still aims to put another car on the road, and that undermines efforts to encourage carpooling.
Giving over HOV lanes to hybrids is probably counterproductive. In Virginia, where allowing hybrids in HOV lanes was pioneered, officials are worried that solo drivers in hybrids are clogging the high-capacity lanes and thereby discouraging carpools (because carpooling is no longer any faster than driving alone). In fact, 25 percent of all Virginia HOV lane users are hybrid drivers. And despite their hype, hybrids are not so fuel efficient that they can offset the fuel efficiency of an ordinary car with two or three riders. So the fuel efficiency of Virginia hybrids may become illusory as the vehicle fleet actually consumes more gas because drivers give up carpooling.
Same goes for other popular incentives: tax breaks and free or reduced-price parking. These incentives encourage people to drive by making it cheaper.
And if some incentives are wrong-headed, it's because they seem to miss the reason why hybrids are good in the first place. If we want to reduce fuel use, it's hard to see why hybrids deserve special tax breaks that are not afforded to buyers of other fuel efficient gas-powered cars (some of which are actually more efficient than certain hybrids). What's so special about hybrids?
But wait! Incentives catalyze the market. That's the basic argument for hybrid-centric policies. The idea is that by encouraging people to get into hybrids now, we'll reduce fossil fuel consumption down the road, when hybrid cars become cost-competitive.
There's some merit to this line of reasoning, but it's starting to seem outdated. The market for hybrids is scorching hot and growing--it probably doesn't need to an additional catalyst. Hybrid sales in 2005 were 10 times higher than in 2001 (and 20 times higher than 2000) and the growth looks set to continue. Incentives are probably a contributing factor, but high fuel prices are probably a much bigger reason.
What's more, the incentives may actually be counter-productive to the real goal. As we've seen, HOV lane access encourages solo driving; free parking and tax breaks make driving cheaper. (Plus, there may be weird counter-intuitive problems that arise from buying certain kinds of hybrids.)
The bottom line is that there's nothing especially laudatory about hybrid cars in and of themselves. The only thing special about them is that--generally speaking--they burn less gas per mile than internal combustion cars. But as the hybrid market diversifies into SUV and Lexus flavors, there's increasingly less reason to lionize hybrids per se. What really matters is fuel efficiency--plain old unsexy fuel efficiency, whether the car runs on gas, electricity, LNG, switch grass, or tiny elves.
I'm not saying that all incentives should disappear, but the incentives should be for fuel efficiency, plain and simple. It doesn't do much good to encourage buying a hybrid Ford Escape when a vanilla Civic is far more eco-credible. Efficient hybrids will still benefit, as will other fuel-sipping cars--just the kind we want on the road.
And there's an asterisk here too: the incentives shouldn't conflict with other instruments to reduce fuel use. Allowing solo drivers into carpool lanes makes about as much sense as slapping a surcharge on bus fare or bicycles to fund rebates for hybrids.
So what kind of incentives would work to increase the fleet's fuel efficiency? Feebates. Gas (or carbon) taxes. Pay-As-You-Drive insurance. Blah, blah, blah. Plus, lots of other stuff that would help make driving a choice, not a necessity.
February 13, 2006
Another plot to cripple the Trans-Alaska Pipeline was foiled recently, reports the Philadelphia Inquirer (via Reuters). A Montana judge gets credit for apprehending the plotter, in Idaho, although Oregon and Washington are the main consumers of oil from Alaskan oil.
A year ago, we released the 2005 Cascadia Scorecard, which detailed the profound vulnerability of Cascadia's energy infrastructure (pdf), including the Trans-Alaska pipe.
The latest plot--which involved blowing up propane trucks along the pipeline, among other acts of sabotage elsewhere--doesn't seem to have been as far along as one in 1999 or one in late 2003. (Both described here (pdf), on pages 30-31.)
The larger story, of course, is that Cascadian officials have done little to secure its energy system in the past year. Pending energy security measures in Washington and Oregon may be bright spots on the horizon.
February 10, 2006
To recap -- the Times article claims that, under the system governing vehicle fuel economy in the U.S., selling a hybrid Escape lets Ford sell an additional Lincoln Navigator without running afoul of federal standards. In other words, while buying an Escape may mean that you're driving a more efficient vehicle, it doesn't mean that the average fuel economy of all the Fords on the road will change one whit.
A couple commentors said this is bunk. But I think the article is onto something. Take a look at the fleetwide fuel economy for Ford's light truck fleet over the last few years for which I could get data:
2000: 21.0 mpg
2001: 20.5 mpg
2002: 20.7 mpg
2003: 21.3 mpg
Now, remember, the CAFE standard for light trucks over this period was 20.7 mpg -- that is, the average mpg for all the light trucks that Ford sold had to be 20.7 or more, or the federal government would levy a fee on each vehicle. From the numbers, it's pretty clear that Ford has been doing its level best to keep its light truck fleet at or near 20.7 each year -- maybe a little above or below, but not enough to incur any penalties (under CAFE rules, exceeding the standards in one year lets you dip below them in subsequent years).
So how does the company fine-tune its vehicle sales to fall right at the CAFE standard? By tweaking its pricing, offering deeper discounts to ramp up sales of higher-mileage pickups and SUVs, while still selling as many hulking SUVs--vehicles with terrible gas mileage but huge profit margins--as it can without running afoul of the standards.
My point here is that the introduction of the 35 mpg Escape, by itself, probably doesn't change this dynamic. Ford is legally required to maximize its profit -- otherwise it faces the threat of a shareholder lawsuit. So it's got an incentive to use whatever means it can to keep the high-profit SUVs moving off the car lots. And that means that selling more Escapes won't necessarily boost the overall efficiency of the vehicles Ford sells. Higher gas prices might boost fuel economy; stricter standards might as well. But as nifty as the high-tech hybrid Escape may be, buying one won't guarantee that Ford's overall mileage is moving in the right direction.
Obviously, the existence of the Escape has spinoff benefits. Among them, it undercuts the car-makers arguments that major improvements in vehicle efficiency are technically impossible. Hybrid SUVs show that the feds could probably lift CAFE standards for light trucks above 30 mpg without forcing automakers to do much, if any, R&D. True, the big auto manufacturers could always say that they can't afford to make trucks more efficient. But they can't say that they don't know how.
But there's yet another perverse market effect hidden in the Escape. CAFE has two tiers, with a higher mileage standard for cars than light trucks. To the extent that the Escape (a light truck) attracts buyers who'd otherwise go for a Taurus (classified as a car), it could tilt Ford's overall mix away from cars and towards trucks -- which, paradoxically, could lower the average fuel economy for Ford's entire vehicle fleet. (Sheesh, this stuff is weird.)
So, all this goes to say that a system can have unpredictable results that undermine the best intentions of any one individual. That's not a reason to throw up one's hands in despair -- but it is a reason to think that changing the system is even more important than making the right kinds of purchases.
February 08, 2006
One Less Car = One Less Parking Spot
At the risk of making this blog too Seattle-centric, I thought I'd point out this nifty article in today's Post-Intelligencer about the city's efforts to promote alternatives to the car -- everything from walking to biking to transit to ride sharing to van pools. And there's ample reason to be concerned about rising car traffic, particularly downtown--not just on environmental grounds, but on financial ones. Cars, you see, take up lots of space in a crowded city; and storing them all is expensive, and takes up real estate that could be put to far better uses. From the article:
In the next 19 years, the city expects 22,000 new housing units and 50,000 new jobs.
Assuming the same percentage of people continued driving alone to work, the city estimates it would have to build 20 city blocks of 10-story parking garages downtown.
That's a lot of parking.
Also note the upside-down state of transportation finances. Funding for the bus system is nowhere near where it needs to be to accomodate all the new riders the city is hoping for. And meanwhile, city officials still seem hell-bent on spending billions for roads, some of which will just make downtown's car problems worse. Obviously, the city deserves a lot of credit for its low-cost efforts to promote alternatives to the car; but in the bigger picture, you have to wonder if they've got their priorities straight.